The Nigerian Employers’ Consultative Association (NECA) has lauded the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) over its decision to reduce the Monetary Policy rate from 13.5 per cent to 12.5 per cent.
The MPC had during its quarterly meeting, on Thursday, in Abuja, reviewed downward the MPR, the rate at which the CBN lends to commercial and other banks.
In a statement on Thursday, NECA said, “The major decision from the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its May 2020 meeting was the reduction of the Monetary Policy Rate (MPR) from 13.5 per cent to 12.5 per cent. We believe that this development signals a pro-growth response that could lead to a reduction in the cost of credit, increase investment and impact positively on output growth, in order to address the current global challenges.”
In the statement signed by its Director-General, Dr Olawale Timothy, NECA said, with the negative effects of COVID-19, twin challenges of the global oil prices, and over-exposure of the economy to external shocks, the decision by the monetary authority was a welcome development.
The statement reads further, “We applaud the current decision of the Monetary Policy Committee, which aligned perfectly with the association’s earlier recommendation.
“It is our belief, that the committee understands that the high-interest rate is a risk to the economy at this time. We, therefore, call for synergy between the fiscal and monetary policies in order to move the economy, which is already in the bleeding stage, forward.
“Development of more robust and coordinated stimulus packages for the sectors that are worst hit by the pandemic, and opening up the non-oil economy for more productivity, to reduce the shock expected from falling global oil prices, would be a welcome development in pulling the economy from nose-diving into recession.”